Barclays’ retreat from Africa may include selling the remaining 50.1 percent stake to a strategic investor, with former Barclays’ boss Bob Diamond already lining up financing.
That would end more than a century of involvement by the British lender in the continent, whose growth prospects were dealt a blow in 2014 when the price of oil and other commodities, export mainstays of many African economies, collapsed.
The sale is also part of the bank’s plan to simplify its structure, shore up its balance sheet and generate higher shareholder returns. Barclays held a 62 percent holding in the company before the placement.
The sale of 103 million shares, priced at R126 each, a discount of 6.5 percent to Thursday’s closing price, was oversubscribed multiple times and attracted “very high quality demand” from domestic and international investors, a source familiar with the matter said.
Shares in Barclays Africa dropped as much as 4 percent before recouping some of the losses to close 2.3 percent lower at R131.60.
“It does seem like a discount but it is also a large chunk of stock that is listed in an environment that has certainly been very volatile,” said Lentus Asset Management’s Chief Investment Officer Nic Norman-Smith. “It’s kind of ‘just get me out’”
Barclays did not give details of the investors who took part in the placing but a source familiar with the matter said the Public Investment Corporation (PIC) took up 10.3 million shares, or a tenth of the $876 million, the most by a single investor.
PIC, Africa’s largest fund manager with more than $122 billion of South African government employee pension assets in its custody, will now own almost 7 percent of the Barclays Africa. It was already the second biggest shareholder in Barclays Africa before the transaction.
The PIC has an option to increase its holding beyond 7 percent without seeking further regulatory approval, the source said. Investors who took part in the placement were pre-approved by the South African Reserve Bank, the source said.
The asset management arm of Anglo-South African insurer Old Mutual, a top 10 investor in Barclays Africa, was also among investors that took part in the private placement, its spokesman said.
